Thinking In Essentials

The other day I shared my thoughts on E.O. Wilson’s quote, you know the one where he writes “We are drowning in information while starving for wisdom. The world henceforth will be run by synthesizers, people able to put together the right information at the right time, think critically about it, and make important choices wisely.”

Here’s a link to it in case you missed it. Anyways… one of the problem sets that we work really hard on solving here at MO is to cut through all the gross noise —  and there’s A LOT of it — in order to tease out the valuable signal. You know, separate the wheat from chaff, synthesize the goods, and all that.

This requires something that we call Ruthless Reductionism, which is really just a fancy way of saying “we work tirelessly to cut away the fat from our process and only use the effective essentials”. In visual form, the process looks like this.

Victor Sperandeo, one of the Trading Greats of the 70’s/80’s era and author of the fantastic book “Trader Vic”, also wrote about the importance  of focusing on essentials. Here’s Vic in his own words (emphasis by me):

“If I had to reduce all the components of my methods to a single phrase, it would be thinking in essentials.

“It’s not necessarily how much you know, but the truth and quality of what you know that counts. Every week in Barron’s there are dozens of pages of fine print summarizing the week’s activities in stocks, bonds, commodities, options, and so forth. There is so much information that to process all of it, and make sense out of it, is a task beyond any genius’s mental capacity.

“One way to narrow down the data is to specialize in one or two areas. Another way is to use computers to do a lot of the sorting out for you. But no matter how you reduce the data, the key to processing information is the ability to abstract the essential information from the bounty of data produced each day.

“To do this, you have to relate the information to principles — to fundamental concepts that define the nature of the financial markets. A principle is a broad generalization that describes an unlimited number of specific events and correlates vast amounts of data. It is with principles that you can take complex market data and make it relatively simple and manageable.

So you could say that taking complex market data and making it relatively simple and manageable is what the team and I at MO do. Not just for our own process but for fellow Operators in our Collective. Our strategies, the tools and indicators we use, the information we aim to share, is tirelessly tested for its efficacy.

For it to get into our toolbox it needs to be able to make us money… We don’t aim to participate in confirmation bias or sensational prediction making here.

I write all this because since we’ve opened up enrollment into our Collective this week. I wanted to share with you the research we sent out to our group over the weekend. So you can take a look for yourself to see if it’s something you may be interested in.

Here’s the link to our Trifecta Report. This report is a macro chartbook that breaks down the: sentiment/positioning, technicals, and fundamentals of the main macro assets we track weekly. It consists of all the primary indicators and charts we look at each week for those markets.

It’s meant to offer a quick scroll through so you don’t start the week unprepared. It goes out every Saturday along with this Stock Alerts report put together by my teammate Brandon. This report shows the most actionable technical chart setups that he’s tracking each week.

And then on Sunday, I sent out this short Market Note discussing the two opposing macro forces at work in markets, currently.

This is just a sampling of what goes out over the weekend. Much more is included with entry into the group. Anyways, if you’re tired of reacting to the financial new click-bate’ery and want to cut out the noise, increase some zen in your investing life, then come and trial us and see if we’re a fit.

Click Here To Read More About The Macro Ops Collective

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Brandon Beylo

Value Investor

Brandon has been a professional investor focusing on value for over 13 years, spending his time in small to micro-cap companies, spin-offs, SPACs, and deep value liquidation situations. Over time, he’s developed a deeper understanding for what deep-value investing actually means, and refined his philosophy to include any business trading at a wild discount to what he thinks its worth in 3-5 years.

Brandon has a tenacious passion for investing, broad-based learning, and business. He previously worked for several leading investment firms before joining the team at Macro Ops. He lives by the famous Munger mantra of trying to get a little smarter each day.


Investing & Personal Finance

AK is the founder of Macro Ops and the host of Fallible.

He started out in corporate economics for a Fortune 50 company before moving to a long/short equity investment firm.

With Macro Ops focused primarily on institutional clients, AK moved to servicing new investors just starting their journey. He takes the professional research and education produced at Macro Ops and breaks it down for beginners. The goal is to help clients find the best solution for their investing needs through effective education.

Tyler Kling

Volatility & Options Trader

Former trade desk manager at $100+ million family office where he oversaw multiple traders and helped develop cutting edge quantitative strategies in the derivatives market.

He worked as a consultant to the family office’s in-house fund of funds in the areas of portfolio manager evaluation and capital allocation.

Certified in Quantitative Finance from the Fitch Learning Center in London, England where he studied under famous quants such as Paul Wilmott.

Alex Barrow

Macro Trader

Founder and head macro trader at Macro Ops. Alex joined the US Marine Corps on his 18th birthday just one month after the 9/11 terrorist attacks. He subsequently spent a decade in the military. Serving in various capacities from scout sniper to interrogator and counterintelligence specialist. Following his military service, he worked as a contract intelligence professional for a number of US agencies (from the DIA to FBI) with a focus on counterintelligence and terrorist financing. He also spent time consulting for a tech company that specialized in building analytic software for finance and intelligence analysis.

After leaving the field of intelligence he went to work at a global macro hedge fund. He’s been professionally involved in markets since 2005, has consulted with a number of the leading names in the hedge fund space, and now manages his own family office while running Macro Ops. He’s published over 300 white papers on complex financial and macroeconomic topics, writes regularly about investment/market trends, and frequently speaks at conferences on trading and investing.

Macro Ops is a market research firm geared toward professional and experienced retail traders and investors. Macro Ops’ research has been featured in Forbes, Marketwatch, Business Insider, and Real Vision as well as a number of other leading publications.

You can find out more about Alex on his LinkedIn account here and also find him on Twitter where he frequently shares his market research.